Prime Minister Scott Morrison has called for global trade rules to be rewritten to account for China’s rise, as the Asian superpower dukes it out with the United States.
Washington and Beijing’s trade war is causing ructions in the global economy, with the tit-for-tat tariff tussle spooking financial markets, particularly in the US.
Mr Morrison said the international system had reached a point where China had enjoyed growth and expansion to become a sophisticated economy.
“The rules that worked for that period won’t work so well for the next period if it is going to be an even playing field,” he told Sky News in an interview aired on Wednesday.
“It is important this gets addressed.”
He said trade rules were set when China was a developing economy.
Now that its rise to an economic superpower is complete, Mr Morrison believes it is time for the system to catch up.
Labor’s foreign affairs spokeswoman Penny Wong agrees.
“There are certainly issues in terms of whether or not the current trading rules reflect global realities,” Senator Wong told ABC Radio.
“We should always make sure that our trade rules – the WTO – are fit for purpose.
“I think it is reasonable to say that the global circumstances are very different, so the reforms of the WTO to reflect those is a sensible way forward.”
The Prime Minister has been at the G7 summit in France where US President Donald Trump said China was ready to return to the negotiating table, a claim which Beijing disputed.
Mr Morrison said it was clear the US wanted to come to an agreement with China.
“I’ve always been consistent in saying we’d like that to happen sooner rather than later because while this rolls out that does have a fairly disruptive impact on confidence in the global economy,” he said.
He warned the issues underpinning the impasse could not be brushed under the carpet.
“You can’t just pretend that all the issues that have led to the tensions in the first place all of a sudden aren’t there,” he said.
“Otherwise any arrangement won’t be enduring.”
Australia has a role to play in the dispute by giving its perspective and that of the Indo-Pacific region in global forums, the prime minister said.
“When you’re a principal in a lot of these discussions, it’s hard to look past and see what’s actually going on,” he told the Australian Financial Review.